Nationwide Financial Services Inc. has reached a tentative agreement to acquire mutual-fund firm Pilgrim Baxter & Associates for about $600 million, according to people familiar with the situation.

This follows months of negotiations among officials at Nationwide, of Columbus, Ohio; Pilgrim Baxter, of Wayne, Pa.; and the fund firm's parent, Boston-based United Asset Management Corp. Last spring, they discussed creating a new company in which Nationwide, Pilgrim Baxter and UAM would have stakes. But Nationwide balked,...